The Right Time to Buy a New Car

The kids and I love it when TJ gets home from work. First, it usually means a much-needed break for me while TJ builds Legos with our boys. It also means I get to speak with a human being about topics other than going potty or not using mommy’s Anastasia Brow Pen as a $30 brown marker. The best part is, I don’t even have to get a phone call or text to know he is heading home. All I have to do is listen for the deafening sounds of TJ’s car struggling down the freeway.

TJ has had his 2000 Chevy Prism since his early years on a college campus. Now, eleven years later, though his situation in life has changed considerably, the car remains. I’ve thought it would die on us for so many years, I can’t believe it’s actually stayed around this long in (semi) working condition. The emergency brake light is always on. The driver’s side door doesn’t open without rolling down the window and opening it from the outside. The “check engine” light has been on and off for eight years. The “door ajar” light also flickers on and off as you travel, playing Russian roulette with our lives as we wonder if the door will suddenly fly open and eject us both. It burns through oil so fast, TJ has to keep several spare quarts in his trunk for trips over 20 miles. If you turn the car off and on in succession by making several quick errands around town, it will likely die on you and need a hit of starter fluid to come back to life. In short, this car is ready to move to Florida and settle down for retirement.

The thing is, TJ has always insisted he loves his car and doesn’t mind driving it to work every day. He still believes it has a few years left in it (he’s been saying this since we were married). It took a full-on intervention from me to convince him it was finally time to get a new car, not only because his car was dying, but also because we could afford it. He has earned the right to drive to work without worrying about an engine exploding in his face.

The discussion about which kind of car to buy diverted into other pertinent conversations about our future. Would we have more than two kids? How much car could we afford? Would we be living in a snowy climate for the next foreseeable future? Should we eat crow and get a minivan? (Never!) These discussions have been ongoing for the last year or so as we became more serious about buying a car. We came up with some ground rules for ourselves in terms of what to buy:

We will only pay cash for a car. We could put half the money down and take a loan on the rest, or we could lease, there are many options out there. But we feel best about paying cash up-front for a car. To us, buying a car that requires payments just means we’re buying a car we can’t really afford.

We eventually need to replace both our cars. So for now, we will be buying a reliable sedan to replace TJ’s car and save up again for the next year to replace my car with a mid-size SUV. And because I’m continuing to grow my small business ventures, I will be able to contribute my side-hustle money to make this happen faster. Go, me!

We want something newer, but not new. We don’t mind driving a car that’s five years old since most cars these days were built to last a really long time. But we also don’t want anything much older than five years, only because we’re not eager to revisit all the problems we’ve had with TJ’s hunk-o’-junk. And we will probably get the most bang for our buck by buying a five-year-old car because it’s already lost half its value while remaining highly reliable.

What strikes me as so funny about all this is how TJ has never really cared what people may think when they see him puttering down the road in his little beater. He almost wears his crappy car as a badge of honor, a testament to his dedication to being thrifty and debt-free. Sure, we could make payments on a beautiful, brand new car, but we would be driving around in a lie. As Dave Ramsey always says, why buy something you can’t afford with money you don’t have to impress people you don’t like? Still, there comes a time to retire the old car and buy something reasonable, and I’m glad we’ve been financially prepared enough to make that leap without going into debt.

What are your car-buying stories? Do you pay cash, or do you take out a loan?

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24 Comments

We currently own 2 cars. One outright and one on loan. Unfortunately, when buying the newer one we didn’t have an option of paying for cash for it, but we chose to be selective in our purchase by picking a car under a certain pricepoint and over paying on the monthly loan payments… there was no need for the 50k SUV we could afford payments on when the used 19k one would do!

You’re totally smart to be thoughtful about the kind of loan you chose! It’s easy to be tempted to go into more debt when the monthly payments may seem almost the same, but it doesn’t pay off in the long run.

I don’t normally contribute to blog discussions so I’m breaking out of my comfort zone here. That and this post also arrived when I was procrastinating about work so typing this buys me another few minutes of hiding from the truth of deadlines.

Now that’s out of the way, can I applaud your husband for sticking with that car through thick and thin but that rather than buy a nearly new one, he gets a bike instead. I don’t want to come across all evangelical about bikes but they’re awesome – you can beat the traffic, it costs almost zero in maintenance and you keep fit at the same time. Sweet! You also have one less car to service, insure, clean, lose its keys (or is that just me?!) etc. I appreciate that I don’t know your circumstances and there may be a gazillion reasons why this wouldn’t work for him. However, if these could be overcome I say do it – biking to work rocks and once you start you get all endorphined up and want more. Stick to one good sized family car and bike to work if you can – its awesome.

A bike would be totally awesome! In fact, a good road bike would most certainly be worth more than his current car. I rode a bike to work every day throughout high school to the library (I was a nerd) five miles away, and I loved it. Every second. I’ll have to ask him how he feels about bikes! He isn’t much of a cardio enthusiast, but who knows? If Jim from The Office can do it, so can he, right? Thanks for the input!

As the proud owner of the car spoken of in this article, I feel it important to add that I have to drive around in the summer blasting my heat so that it doesn’t overheat….I’m almost at my breaking point.

Fun car story! My first car was a 2002 Dodge Stratus I purchased in 2010 for $4200. I took out a loan as I just started my first job where I couldn’t easily bike to work (Provo to Salt lake). A few years later I got married, and my wife hated that car! AC went out, engine trouble and the like. We decided to get me a new car, so in 2013 I bought a 2010 Toyota Corolla XLE for $19200, and a loan of about $16k. We paid it off in about 15 months because we hated the debt as it was our only kind. Then we moved overseas and didn’t need any car for a while, so we sold it for $16k. Now that we’re settled back in the US, we bought a 2015 Toyota Corolla for all cash for less than our previous sale and feel great about it!! Paying cash really helped us make a different choice than we would have otherwise! If you can’t afford it in cash, you can’t afford it!

I bought a “new” car (it was a year old) when I relocated to a snowy climate (my two door pick up truck wasn’t going to cut it here). I could have bought it in cash (and almost did) but I was worried about my cushion. I put more than half down, and took a small loan for the rest. Probably should have paid in cash, but at the time, I was in a bind. I paid it off early (In under 3 years), and am SO grateful to not have a payment anymore. I am now putting double monthly payments aside for my next car, whenever that is. I want to pay for my next one in cash!

You’re totally right, pretty much ANY car newer than his and slightly better-functioning would be a huge step up! Love that you still have that car for work, cars really do eat up a lot of money quickly if you’re not careful.

I was given a car on my graduation from university…A 11 year old grand am with 250k on it. It lasted a trip across the country in the middle of summer with no AC. Then I drove it another 2 years and the heater died. It was several thousand to fix both so I donated it to charity and bought used again. Now my new one is all paid off and I’ll drive it for probably close to ten years before I need a new one….Then I’m splurging for a luxury label!(but probably not)

We’re all about driving our cars into the ground, quite literally in my husband’s case. We should all be forced to drive crappy cars just for the sake of the amazing anecdotes we’ll be able to tell people later on.

I had a 98 Camry with 235k miles on it until 6 months ago (owned for 11 years). I wrote a check for $19k and left Carmax with a 2011 Lexus ES350 with 72k miles and Navigation. Started saving $250 a month because in 5 years I should be able to sell this Lexus for at least $6-9k and will have $15k saved and get another Lex if I choose. No car payments ever, but always save and just pay cash. I hate banks.

Last year we paid cash for an 8yr old minivan (just give in, they’re the best!) with 135k miles on it. It has felt like an upgrade in every way and has been totally reliable. We pay cash and buy well used cars. The problem that I run into is that cars are more than transportation to me; they are a hobby as well. I’m no expert, but I consider myself an automotive and driving enthusiast. I’ve been driving the same econo-box for 10 years now. At this point I feel like a little part of me dies every time I get in the thing and drive something so un-fun to drive. I specifically got a manual to try and keep it more engaging to drive, but so little power can only keep your interest for so long. On the other-hand, I haven’t been able to pull the trigger on something else, because it works perfectly fine and never breaks down. So I’m perpetually unhappy with it, but I’m unwilling to buy something else; I need to work on it.

That’s cool that you know cars so well and consider yourself an “enthusiast!” I am only enthusiastic about not driving in my husband’s current car. But I hear you with the conflict of not wanting to get something new when the current thing is working just fine. But also give yourself permission to splurge just a little when your finances warrant it!

We still owe on our current car, but we plan on driving this car into the ground and hopefully paying cash for the next one. I bent to the pressure of buying a brand new car this time around and have found that it wasn’t the best decision for me. Next time, like you, I would aim for a newer car but not a BRAND new car.

Thanks for this post and information! Buying a “new” car has always been stress for my husband and me. We both grew up with very different car views. His family bought brand new cars every few years. My family would by used and run them to the ground!

Hmm, when I got my first full time job out of grad school, I bought a brand new 2010 Honda Civic (cuz thats what you do when you get a full time job right–go into debt for a car, right?!?). Mom helped me put money down and I had a car loan. Luckily paid back Mom and Wells Fargo several years ago in my debt free journey. This March my car turns 7 years old and is about to hit 100K and runs wonderfully. I love driving my paid off car.
The general game plan is for my next car to be a newer but not brand new Honda Cr-V to work with future kiddos better. We plan to save and pay cash for the CRV. Then my fiance will sell his 2007 Nissan Sentra and take my Honda Civic. Then use the money from the Sentra to begin to save for his newer but not brand new car-model TBD. That’s our car plan in the next few years!

Driving a paid-for car just FEELS better, doesn’t it? I love it. And I love that you have a car plan like us – I think it’s just necessary to really plan ahead for those kinds of bigger purchases! You’re playing it really smart.

I definitely agree with you that you should only buy a car that you can afford! Shopping for a car takes a lot of research! My first two cars were a 1990 and 2002 Honda Accords that were handed down to me from my family members! I now am leasing a 2015 Honda Civic that is very reasonably priced! You don’t need to buy a brand new car, buying an older model is cheaper and are very close in style!

I wasn’t thrilled about a minivan either, but it sure beats having to open the doors myself for a whole bunch of little kids to crawl in and out of. But with a small number of kids, yes, get an SUV! Either open the door for them every time, or teach them how to open doors properly so it doesn’t knock into and dent other people’s cars.

I have been down the financing path a few times now and I’ve got to say, I agree whole-heartedly, cash money is the only way to go. I drive a $500 car and I’d rather do that for a decade than get back into a car loan.

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